Crunch Craft, a catering company, provides catering services to its customers. Customers normally pay for catering services after the service has been provided. In January 2022, Crunch Craft provided catering services worth $30,000 which it will receive in cash in February 2022. A senior accountant at Crunch Craft wants to record the $30,000 as an asset in the company’s Balance Sheet at the end of January 2022. Should the $30,000 be recorded as an asset in the company’s Balance Sheet at the end of January 2022? Explain, using the definition and recognition criteria of an asset in your explanation.
Crunch Craft, a catering company, provides catering services to its customers. Customers normally pay for catering services after the service has been provided. In January 2022, Crunch Craft provided catering services worth $30,000 which it will receive in cash in February 2022. A senior accountant at Crunch Craft wants to record the $30,000 as an asset in the company’s Balance Sheet at the end of January 2022. Should the $30,000 be recorded as an asset in the company’s Balance Sheet at the end of January 2022? Explain, using the definition and recognition criteria of an asset in your explanation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Crunch Craft, a catering company, provides catering services to its customers. Customers normally pay for catering services after the service has been provided. In January 2022, Crunch Craft provided catering services worth $30,000 which it will receive in cash in February 2022. A senior accountant at Crunch Craft wants to record the $30,000 as an asset in the company’s
Should the $30,000 be recorded as an asset in the company’s Balance Sheet at the end of January 2022? Explain, using the definition and recognition criteria of an asset in your explanation.
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